In an era of unprecedented access to information and technology, retail investors are carving a new path by embracing artificial intelligence (AI) for investment research. This is according to a recent survey conducted by Public.com, which highlighted how investors are incorporating AI into their decision-making process.
Public is an investing platform that lets members invest in stocks, Treasuries, ETFs, crypto, and alternative assets with deep fundamental data and custom analysis powered by AI. The platform surveyed 2,000+ retail investors and reviewed investing flows throughout the year to compile its report for the first half of the year.
Revolutionizing Research? AI Takes Center Stage
A noteworthy finding from the report reveals that investors have amplified the diversity of their portfolios by a staggering 25% year-over-year, encompassing assets, such as stocks, ETFs, Treasury bills, cryptocurrencies , and alternative investments.
Retail investors are not only diversifying their portfolios but are also revolutionizing their research and due diligence practices. The report reveals a remarkable paradigm shift, with nearly 19% of retail investors already incorporating AI into their investment research process.
Besides that, the report indicated that trust and credibility have taken center stage, with 69.4% of investors prioritizing these factors in their information sources, marking a substantial increase from the previous year. The integration of AI in research is subtly replacing the significance of social media as a primary decision-making channel.
However, while AI continues to reshape investment research, the role of social media as a decision-making channel persists. Public.com’s findings reveal that 16% of investors consider social media buzz as an important signal in investment decisions. Additionally, cultural trends, whether positive or negative, wield powerful influence in triggering trading responses.
AI and Human Touch in Trading Evolution
In June, Finance Magnates published a report highlighting how AI and Machine Learning (ML) were ushering in an era of advanced data analysis and pattern recognition within the forex B2B solutions. The foreign exchange market generates an immense volume of data, encompassing price fluctuations, economic indicators, news, and trade sentiments.
AI and ML algorithms now possess the capacity to instantaneously process and analyze this data, unearthing hidden patterns, trends, and correlations that human traders may overlook. This newfound ability reportedly empowers forex B2B firms to identify trading opportunities and better comprehend market behavior.
However, FXStreet’s Analyst, Ian Coleman, said in an interview with Finance Magnates in May that AI should be viewed as an overlay to enhance human analysis. He said that while AI provides signals and insights, human intervention is essential to ensure proper risk-reward assessment and adaptability to changing market dynamics.
